A Plain Suggestion

My AFR op-ed today discusses the evidence in favour of plain packaging for tobacco as a way of reducing smoking rates.

Cigarettes: The Plain Facts, Australian Financial Review, 31 May 2011

A family friend has been a chain smoker for the past sixty years. Last week, doctors discovered the cancer that has eaten away at his larynx. If he wants to get rid of it, he will need an eight-hour operation, which will leave him speaking through an artificial voicebox. As you read this, he is deciding whether it might be better just to give the game away altogether.

If tobacco had been discovered in 2011, it’s unlikely that most developed countries would legalise it. Uniquely, smoking is harmful even in small doses. This makes it unlike other legal vices, which can be consumed in moderation. The occasional double whiskey or deep-fried mars bar won’t kill you – but as the ad says ‘every cigarette brings cancer closer’.

Because cigarettes are such an abnormal product, the government is aiming to take away one of the tobacco industry’s last avenues for promotion: an attractive pack design. Described as ‘the silent salesman’, cigarette companies have long relied on slick packets to communicate to consumers not merely the desirability of their product, but also to reach out to particular target groups, such as youth, women, or consumers wanting a milder product.

In marketing jargon, cigarettes are known as a ‘badge product’, because the packaging is frequently displayed to others. As one industry insider put it, ‘if you smoke, a cigarette pack is one of the few things you use regularly that makes a statement about you. A cigarette pack is the only thing you take out of your pocket 20 times a day and lay out for everyone to see. That’s a lot different than buying your soap powder in generic packaging.’

Plain packaging isn’t just about replacing blue chevrons, sunsets, luxury golds and powerful blues with a decidedly un-sexy olive green background. It’s also about increasing the impact of the health warnings, since past research has shown that people take health warnings less seriously when they sit alongside brand imagery. With pictures of diseased teeth and eyes, mock-ups of the new cigarette packages look like something out of a medical textbook.

Yes, but will it work? Although no country has yet implemented plain packaging, medical researchers have run a spate of laboratory experiments to see how people’s perceptions of cigarettes change as design elements are progressively removed from the pack. For example, a 2009 study by Daniella Germain and coauthors recruited Australian adolescents (smokers and nonsmokers). The researchers then randomly showed them either regular cigarette packages, plain packages, or something in between. As branding was removed, adolescents became less positive about the kinds of people who smoked that cigarette, and more negative about its taste.

The laboratory evidence accords with what the tobacco industry has found in its street surveys. One marketing report (released as part of the US tobacco settlement) mournfully noted: ‘when we offered them Marlboros at half price – in generic brown boxes – only 21% were interested, even though we assured them that each package was fresh, had been sealed at the factory and was identical (except for the different packaging) to what they normally bought at their local, tobacconist or cigarette machine.’

Not surprisingly, the tobacco industry has reacted vehemently to plain packaging legislation, arguing that it will lead them to cut prices. From an economic standpoint, it is hard to see why this should occur. Price wars are generally a reaction to a temporary change in market conditions (such as the entry of a highly-leveraged competitor) – not to long-run changes in the market environment. The industry has also claimed that plain packaging will boost the illegal market, a strange claim given that many black market cigarettes are already sold in plain packages.

Since the 1980s (when I was an adolescent), the national smoking rate has fallen from 31 percent to 17 percent. Yet the smoking rate remains considerably higher for disadvantaged groups: 26 percent among people living in low socioeconomic areas, 34 percent among Indigenous Australians, and 38 among the unemployed. Smokers in these groups also consume 15-20 percent more cigarettes than the average smoker.

If we are to close the life expectancy gap between rich and poor, and between Indigenous and non-Indigenous Australians, then cutting smoking rates is vital. Along with higher cigarette taxes, subsidised nicotine patches and anti-smoking advertisements, plain packaging should help reduce cigarette consumption. It may be too late for my family friend, but there’s still time to make smoking an ugly choice for today’s youth.